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Saturday, March 26, 2011

How to Deal With Harassing Creditors and Debt Collectors

If you are getting harassing calls from creditors, know that you have rights under the law. When you have that knowledge, you empower yourself. Now, I am not saying that creditors don’t have a right to collect on an unpaid debt. Creditors absolutely are within their rights to use legal means to get the money that is owed. I think that the majority of debt collectors are professional and reasonable in their approach. However, should you ever encounter an unscrupulous and nasty debt collector, there is a federal law that protects you. It is called the Fair Debt Collection Practices Act (FDCPA). I have summarized the points that I think are most important below. The FDCPA refers to people who are obligated to pay debts as “consumers”, so this is the term that I will use is my summary.

Debt collectors are not allowed to do the following things:

Discuss details about a consumer’s debt to a third party, such as relatives, employers, neighbors, etc.

Send postcards

Communicate more than once with third parties about contacting the consumer

Use language on the outside of mailed correspondence which identifies that the mailing is in regards to a debt collection or that the mailing is from a debt collector

Communicate with the consumer or third parties after notification that the consumer is represented by an attorney; All communications must occur through the attorney

Contact the consumer regarding the debt before 8 a.m. and after 9 p.m., in the consumer’s time zone

Contact the consumer at his or her place of employment, after being told not to

Contact the consumer about the debt after receiving written notification by the consumer to cease contact; Afterwards, the debt collector can contact the consumer only to give notice of further legal action, like lawsuit.

Engage in behavior that is meant to harass, oppress, or abuse the consumer

Use threat of physical violence, harm to reputation, or property damage

Use profane, obscene, or abusive language in communications with the consumer (for example, threatening to shoot your dog)

Publish a list of the names of consumers that have not paid their debts, except to a consumer credit reporting agency, such as Equifax.

Cause a consumer’s phone to continually ring in order to annoy or harass

Misrepresent that the debt collector is a law firm, affiliated with law enforcement, and/or the government

Misrepresent the nature, status, and amount of debts (For example, claim that a consumer owes a debt when in reality, the consumer does not owe a debt)

Tell a consumer that he or she will be arrested for not paying the debt (debtor’s prison does not exist in the United States)

Threaten to seize property or garnish wages unless it is intended through a legal process

Distribute a misleading or phony legal document regarding the debt or misrepresent that a document is authorized by the government or court system ( example, a phony summons, search warrant)

Collect amounts besides the amount of the original debt and lawful interest and fees

Coerce consumers to submit postdated checks

If you feel that you are being harassed by a debt collector, get the name of that collector. Also, save any harassing messages or correspondence received. Next, contact an attorney that deals with harassment by debt collectors. Then, you can determine whether you should file a lawsuit against the debt collector and a formal complaint with the Federal Trade Commission. If the debt collector is found to be in violation of the FDCPA, you may be able to get damages, attorneys fees, and costs in a lawsuit, plus the FTC could impose a fine on the debt collector. Please be aware that this law does not apply to in house collectors working for original creditors. You might want to check your state statutes to learn what your rights are when it comes to in house collection from the orginal creditor. There are some other areas of this law that I didn’t summarize here. You can read more about the Fair Debt Collection Practices Act at ftc.gov.